16 RAMOS Vs OBISPO

SUPREME COURT REPORTS ANNOTATED VOLUME 692 4/1/20, 3:29 AM
G.R. No. 193804. February 27, 2013.*
SPOUSES NILO RAMOS and ELIADORA RAMOS,

petitioners, vs. RAUL OBISPO and FAR EAST BANK AND
TRUST COMPANY, respondents.
Civil Law; Accommodation Mortgage; Third persons who are

not parties to the principal obligation may secure the latter by
pledging or mortgaging their own property.·The validity of an
accommodation mortgage is allowed under Article 2085 of the Civil
Code which provides that „[t]hird persons who are not parties to the
principal obligation may secure the latter by pledging or
mortgaging their own property.‰ An accommodation mortgagor,
ordinarily, is not himself a recipient of the loan, otherwise that
would be contrary to his designation as such.
_______________
* FIRST DIVISION.
241
VOL. 692, FEBRUARY 27, 2013 241
Ramos vs. Obispo
Remedial Law; Evidence; Preponderance of Evidence; Burden of

Proof; In civil cases, basic is the rule that the party making
allegations has the burden of proving them by a preponderance of
evidence; The extent of the relief that may be granted can only be as
much as has been alleged and proved with preponderant evidence
required under Section 1 of Rule 133 of the Revised Rules on
Evidence.·In civil cases, basic is the rule that the party making
allegations has the burden of proving them by a preponderance of
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evidence. Moreover, parties must rely on the strength of their own

evidence, not upon the weakness of the defense offered by their
opponent. This principle equally holds true, even if the defendant
had not been given the opportunity to present evidence because of a
default order. The extent of the relief that may be granted can only
be as much as has been alleged and proved with preponderant
evidence required under Section 1 of Rule 133 of the Revised Rules
on Evidence.
Same; Same; Same; Words and Phrases; Preponderance of
evidence is the weight, credit, and value of the aggregate evidence on
either side and is usually considered to be synonymous with the term
„greater weight of the evidence‰ or „greater weight of the credible
evidence.‰·Preponderance of evidence is the weight, credit, and
value of the aggregate evidence on either side and is usually
considered to be synonymous with the term „greater weight of the
evidence‰ or „greater weight of the credible evidence.‰
Preponderance of evidence is a phrase which, in the last analysis,
means probability of the truth. It is evidence which is more
convincing to the court as worthier of belief than that which is
offered in opposition thereto.
Same; Same; Fraud; Clear and Convincing Evidence; The
Supreme Court has stressed time and again that allegations must be
proven by sufficient evidence because mere allegation is definitely
not evidence. Moreover, fraud is not presumed·it must be proved by
clear and convincing evidence.·As to fraud, the rule is that he who
alleges fraud or mistake affecting a transaction must substantiate
his allegation, since it is presumed that a person takes ordinary
care of his concerns and that private transactions have been fair
and regular. The Court has stressed time and again that allegations
must be proven by sufficient evidence because mere allegation is
definitely not evidence. Moreover, fraud is not presumed·it must
be proved by clear and convincing evidence.
242
242 SUPREME COURT REPORTS ANNOTATED
Ramos vs. Obispo
Civil Law; Accommodation Mortgage; An accommodation

mortgagor, ordinarily, is not himself a recipient of the loan,
otherwise that would be contrary to his designation as such.·It

bears stressing that an accommodation mortgagor, ordinarily, is not
himself a recipient of the loan, otherwise that would be contrary to
his designation as such. We have held that it is not always
necessary that the accommodation mortgagor be apprised
beforehand of the entire amount of the loan nor should it first be
determined before the execution of the Special Power of Attorney in
favor of the debtor. This is especially true when the words used by
the parties indicate that the mortgage serves as a continuing
security for credit obtained as well as future loan availments.
Remedial Law; Evidence; Preponderance of Evidence; A
preponderance of the evidence is essential to establish the invalidity
of a mortgage, and it has been said that clear and convincing proof
is necessary to show fraud, duress, or undue influence.·A
preponderance of the evidence is essential to establish the invalidity
of a mortgage, and it has been said that clear and convincing proof
is necessary to show fraud, duress, or undue influence. Any relevant
and material evidence otherwise competent is admissible on the
issue of the validity of a mortgage. Petitioners utterly failed to
present relevant evidence to support their factual claims and
offered no explanation whatsoever. Such omission is fatal to their
cause.
SERENO, C.J., Dissenting Opinion:
Remedial Law; Civil Procedure; Judgments; View that, the
Supreme Court has upheld convictions in criminal cases based on
the sole, uncorroborated testimony of a single witness; there is no
reason why we cannot similarly rely on clear and convincing
testimonial evidence in a civil case.·While the ponencia is correct
in pointing out that the facts, as narrated by petitioner-spouses, are
beyond the normal occurrence of events, their narration is not
entirely incredible and implausible. To my mind, they have
successfully painted an unfortunate but common picture of
individuals who have placed their full trust in the wrong party and
ended up being defrauded in the end. Finding that there is a dearth
of evidence to back up their story, the ponencia refuses to give
credence to the testimonies of petitioner-spouses. I believe, however,
that their unwavering testimonies, both on direct and cross-
examination, suffice to establish
243
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Ramos vs. Obispo
their claims. Time and again, this Court has upheld convictions in
criminal cases based on the sole, uncorroborated testimony of a
single witness; there is no reason why we cannot similarly rely on
clear and convincing testimonial evidence in a civil case.
Civil Law; Extraordinary Diligence; Banks and Banking; View
that banks have the duty of proving that they have exercised
extraordinary diligence in approving the mortgage contract in
question.·In Philippine Trust Company v. Court of Appeals, we
have ruled that because the business of banks is imbued with public
interest, they are expected to exercise more care and prudence than
private individuals, even in cases involving registered lands. Banks,
therefore, have the duty of proving that they have exercised
extraordinary diligence in approving the mortgage contract in
question.
Same; Same; Same; View that banks play a central role in the
economic life of our society, and it is not without reason that we have
placed upon them the burden of exercising extraordinary diligence
when dealing with other economic actors.·In situations such as
these, I believe that the interests of society would best be served if
the economic risk of the transaction is placed on the negligent bank.
Banks play a central role in the economic life of our society, and it is
not without reason that we have placed upon them the burden of
exercising extraordinary diligence when dealing with other
economic actors. Thus, I vote to GRANT the instant Petition for
Review, SET ASIDE and REVERSE the assailed Decision and
Resolution of the Court of Appeals in CA-G.R. CV No. 82378, and
REINSTATE the Decision of the Regional Trial Court, Branch 82,
Quezon City, in Civil Case No. Q-99-38988.
PETITION for review on certiorari of a decision of the

Court of Appeals.
The facts are stated in the opinion of the Court.
Surla & Surla Law Office for petitioners.
Benedicto, Verzosa, Gealogo & Burkley for respondent
Bank.
244

Ramos vs. Obispo
VILLARAMA, JR, J.:
Assailed in this petition for review on certiorari under
Rule 45 is the Decision1 dated January 27, 2010 of the
Court of Appeals (CA) in CA-G.R. CV No. 82378 which
reversed and set aside the Decision2 dated January 29,
2004 of the Regional Trial Court (RTC) of Quezon City,
Branch 82 in Civil Case No. Q-99-38988.
The facts follow:
Petitioner Nilo Ramos and respondent Raul Obispo met
each other and became best friends while they were
working in Saudi Arabia as contract workers. After both
had returned to the Philippines, Ramos continued to visit
Obispo who has a hardware store. Sometime in August
1996, petitioners executed a Real Estate Mortgage (REM)
in favor of respondent Far East Bank and Trust Company
(FEBTC)-Fairview Branch, over their property covered by
Transfer Certificate of Title (TCT) No. RT- 64422 (369370)
of the Registry of Deeds of Quezon City. The notarized
REM secured credit accommodations extended to Obispo in
the amount of P1,159,096.00. On even date, the REM was
registered and annotated on the aforesaid title.3
On September 17, 1999, FEBTC received a letter from
petitioners informing that Obispo, to whom they entrusted
their property to be used as collateral for a P250,000.00
loan in their behalf, had instead secured a loan for
P1,159,096.00, and had failed to return their title despite
full payment by petitioners of P250,000.00. Petitioners
likewise demanded that FEBTC furnish them with
documents and papers pertinent to the mortgage failing
which they will be constrained to
_______________
1 Rollo, pp. 33-42. Penned by Associate Justice Priscilla J. Baltazar-
Padilla with Associate Justices Andres B. Reyes, Jr. and Arcangelita M.
Romilla-Lontok concurring.
2 Id., at pp. 76-83. Penned by Judge Severino B. De Castro, Jr.
3 Records, pp. 164-169.
245
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Ramos vs. Obispo
refer the matter to their lawyer for the filing of appropriate

legal action against Obispo and FEBTC.4
There being no action taken by FEBTC, petitioners filed
on October 12, 1999 a complaint for annulment of real
estate mortgage with damages against FEBTC and Obispo.
Petitioners alleged that they signed the blank REM form
given by Obispo who facilitated the loan with FEBTC, and
that they subsequently received the loan proceeds of
P250,000.00 which they paid in full through Obispo. With
their loan fully settled, they demanded the release of their
title but Obispo refused to talk or see them, as he is now
hiding from them. Upon verification with the Registry of
Deeds of Quezon City, petitioners said they were surprised
to learn that their property was in fact mortgaged for
P1,159,096.00. Petitioners thus prayed that the REM be
declared void and cancelled; that FEBTC be ordered to
deliver to them all documents pertaining to the loan and
mortgage of Obispo; and that FEBTC and Obispo be
ordered to pay moral damages and attorneyÊs fees.5
In its Answer With Compulsory Counterclaim and
Cross-claim, FEBTC averred that petitioners agreed to
execute the REM over their property as partial security for
the loans obtained by Obispo with a total principal balance
of P2,500,000.00. Since the obligation secured by the REM
remains unpaid, FEBTC contended that it should not be
compelled to release the mortgage on the subject property.
FEBTC further asserted that petitioners are guilty of
laches and their claim already barred by estoppel. Under
its cross-claim, FEBTC prayed that in the event of
judgment rendered in favor of petitioners, Obispo should be
made liable to answer for all the claims that may be
adjudged against it plus all damages it suffered.6
_______________
4 Id., at pp. 170-171.
5 Id., at pp. 3-7.
6 Id., at pp. 17-21.
246

Ramos vs. Obispo
On motion of petitioners, Obispo was declared in default

for failure to file any responsive pleading despite due
receipt of summons which he personally received.
After trial, the RTC rendered its Decision in favor of the
petitioners and against the respondents, as follows:
WHEREFORE, premises considered, judgment is hereby

rendered in favor of the plaintiffs and against defendants Raul J.
Obispo and Far East Banking Trust Company (now Bank of the
Philippine Islands) as follows:
a) Declaring the real estate mortgage in favor of defendant Far
East Bank & Trust Company (now Bank of Philippine Islands) null
and void;
b) Ordering defendant FEBTC (now BPI) to cancel the
encumbrance on Transfer Certificate of Title No. RT-64422 [369370]
and release and surrender the Owners Duplicate copy thereof to the
herein plaintiffs;
c) Ordering defendants Obispo and FEBTC (BPI) to pay the
plaintiffs jointly and severally the sum of P200,000.00 as and by
way of moral damages;
d) Ordering defendants Obispo and FEBTC (BPI) to pay the
plaintiffs, jointly and severally the sum of P50,000.00 as and by way
of attorneyÊs fees, and the cost of suit.
The cross-claim set forth by defendant FEBTC (BPI) against its
co-defendant Obispo is hereby ordered dismissed for lack of merit.
SO ORDERED.7
FEBTC appealed to the CA which reversed the trial

courtÊs decision and dismissed the complaint, holding that
petitioners were third-party mortgagors under Article 2085
of the Civil Code and that they failed to present any
evidence to prove their allegations. The appellate court
thus decreed:
WHEREFORE, the assailed January 29, 2004 Decision of the

Regional Trial Court of Quezon City, Branch 82 in Civil Case No. Q-
_______________
7 Rollo, p. 83.
247
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Ramos vs. Obispo
99-38988 is hereby REVERSED and SET ASIDE and a new one is

entered DISMISSING the Complaint of plaintiffs-appellees in Civil
Case No. Q- 99-38988.
SO ORDERED.8
Petitioners filed a motion for reconsideration but it was

denied by the CA.
Hence, this petition raising the following errors
allegedly committed by the appellate court when:
I
IT SET ASIDE THE DECISION DATED JANUARY 29, 2004
RENDERED BY BRANCH 82 OF THE REGIONAL TRIAL COURT
OF QU[E]ZON CITY BY UPHOLDING THE VALIDITY OF THE
REAL ESTATE MORTGAGE AND RULING THAT THE
PETITIONERS WERE ACCOMMODATION MORTGAGORS OF
RESPONDENT RAUL OBISPO DESPITE THE FACT THAT NO
CONSENT TO SUCH EFFECT WAS GIVEN BY THEM AND THE
PREPARATION THEREOF WAS ATTENDED BY FRAUDULENT
ACTS OR MISREPRESENTATIONS;
II
IT DISREGARDED EXISTING LAWS AND CURRENT
JURISPRUDENCE IN NOT DECLARING THE RESPONDENT
BANK AS NOT A MORTGAGEE IN GOOD FAITH DESPITE THE
CONTRARY FINDING OF THE TRIAL COURT; and
III
IT DISREGARDED EXISTING LAWS AND SETTLED
JURISPRUDENCE WHEN IT LIKEWISE DELETED IN ITS
DISPUTED DECISION THE AWARD OF DAMAGES,
ATTORNEYÊS FEES AND COST OF SUIT IN FAVOR OF THE
PETITIONERS.9
The petition has no merit.
_______________
8 Id., at p. 41.
9 Id., at pp. 16-17.
248

Ramos vs. Obispo
The validity of an accommodation mortgage is allowed

under Article 2085 of the Civil Code which provides that
„[t]hird persons who are not parties to the principal
obligation may secure the latter by pledging or mortgaging
their own property.‰ An accommodation mortgagor,
ordinarily, is not himself a recipient of the loan, otherwise
that would be contrary to his designation as such.10
In this case, petitioners denied having executed an
accommodation mortgage and claimed to have executed the
REM to secure only their P250,000.00 loan and not the
P1,159,096.00 personal indebtedness of Obispo. They
claimed it was Obispo who filled up the REM form contrary
to their instructions and faulted FEBTC for being negligent
in not ascertaining the authority of Obispo and failing to
furnish petitioners with copies of mortgage documents.
Obispo initially gave them P100,000.00 and the balance
was given a few months later. After supposedly completing
payment of the amount of P250,000.00 to Obispo,
petitioners discovered that the REM secured a bigger
amount. Because of the alleged fraud committed upon them
by Obispo who made them sign the REM form in blank,
petitioners sought to have the REM annulled and their title
over the mortgaged property released by FEBTC. In other
words, since their consent to the REM was vitiated, judicial
declaration of its nullity is in order. The RTC granted relief
to petitioners while the CA found the subject REM as a
valid third-party or accommodation mortgage due to
petitionersÊ failure to substantiate their allegations with
the requisite quantum of evidence.
We sustain the decision of the CA.
In civil cases, basic is the rule that the party making
allegations has the burden of proving them by a
preponderance of evidence. Moreover, parties must rely on
the strength of their own evidence, not upon the weakness
of the defense offered by
_______________
10 Sps. Belo v. Philippine National Bank, 405 Phil. 851, 870; 353
SCRA 359, 371 (2001).
249
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Ramos vs. Obispo
their opponent. This principle equally holds true, even if

the defendant had not been given the opportunity to
present evidence because of a default order. The extent of
the relief that may be granted can only be as much as has
been alleged and proved with preponderant evidence
required under Section 1 of Rule 133 of the Revised Rules
on Evidence.11
Preponderance of evidence is the weight, credit, and
value of the aggregate evidence on either side and is
usually considered to be synonymous with the term
„greater weight of the evidence‰ or „greater weight of the
credible evidence.‰ Preponderance of evidence is a phrase
which, in the last analysis, means probability of the truth.
It is evidence which is more convincing to the court as
worthier of belief than that which is offered in opposition
thereto.12
As to fraud, the rule is that he who alleges fraud or
mistake affecting a transaction must substantiate his
allegation, since it is presumed that a person takes
ordinary care of his concerns and that private transactions
have been fair and regular.13 The Court has stressed time
and again that allegations must be proven by sufficient
evidence because mere allegation is definitely not
evidence.14 Moreover, fraud is not
_______________
11 Heirs of Pedro De Guzman v. Perona, G.R. No. 152266, July 2, 2010,
622 SCRA 653, 661-662, citing Gajudo v. Traders Royal Bank, G.R. No.
151098, March 21, 2006, 485 SCRA 108, 119-120.
12 Chua v. Westmont Bank, G.R. No. 182650, February 27, 2012, 667
SCRA 56, 68, citing Eulogio v. Apeles, G.R. No. 167884, January 20,
2009, 576 SCRA 561, 571-572.
13 Revised Rules of Court, Rule 131, Sec. 3(p); Dutch Boy Philippines,
Inc. v. Seniel, G.R. No. 170008, January 19, 2009, 576 SCRA 231, 240,
citing Memita v. Masongsong, G.R. No. 150912, May 28, 2007, 523 SCRA
244, 256-257; and Mangahas v. Court of Appeals, 364 Phil. 13, 21; 304
SCRA 375, 382 (1999).
14 Real v. Sangu Philippines, Inc., G.R. No. 168757, January 19, 2011,
640 SCRA 67, 85, citing General Milling Corporation v. Casio, G.R. No.
149552, March 10, 2010, 615 SCRA 13, 32-33.
250

Ramos vs. Obispo
presumed·it must be proved by clear and convincing

evidence.15
In this case, petitionersÊ testimonial evidence failed to
convince that Obispo deceived them as to the debt secured
by the REM. PetitionersÊ factual allegations are not firmly
supported by the evidence on record and even inconsistent
with ordinary experience and common sense.
While petitioners admitted they knew it was from
FEBTC they will secure a loan, it was unbelievable for
them to simply accept the P250,000.00 loan proceeds
without seeing any document or voucher evidencing release
of such amount by the bank containing the details of the
transaction such as monthly amortization, interest rate
and added charges. It is difficult to believe petitionersÊ
simplistic explanation that they requested documents from
Obispo but the latter would not give them any. Such failure
of Obispo to produce any receipt or document at all coming
from the bank should have, at the first instance, alerted
the petitioners that something was amiss in the loan
transaction for which they voluntarily executed the REM
with their own property as collateral. Not only that, despite
being aware of the absence of any document to ascertain if
Obispo indeed filled up the REM contract form in
accordance with their instructions, petitioners accepted the
supposed loan proceeds in the form of personal checks
issued by Obispo who claimed to have an account with
FEBTC, instead of checks issued by the bank itself. These
alleged checks were not submitted in evidence by the
petitioners who could have easily obtained copies or record

proving their issuance and encashment.
Another disturbing fact is why, despite having signed
the REM contract in their name as mortgagors, petitioners
did not go directly to the bank to pay their loan. One is also
_______________
15 Mindanao State University v. Roblett Industrial and Construction
Corporation, G.R. No. 138700, June 9, 2004, 431 SCRA 458, 467.
251
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Ramos vs. Obispo
tempted to ask how petitioners could have possibly arrived

at the amount of amortization payments without having
seen any document from FEBTC pertaining to their loan
account. Such conduct of petitioners in not bothering to
appear before the bank or directly dealing with it regarding
their outstanding obligation strongly suggests that there
was no such loan account in their name and it was really
Obispo who was the borrower and petitioners were merely
accommodation mortgagors.
But assuming for the moment that petitioners really
entrusted to Obispo the remittance of their payments to
FEBTC, it is difficult to comprehend that they continued
making payments to him despite the latterÊs not having
complied at all with their repeated demands for the
corresponding receipt from the bank. These demands for
bank documents apparently had gone unheeded by Obispo
for about one year and three months·the same period
before petitioners were able to make full payment.16 Such
considerably long period that petitioners remained
indifferent and took no prompt action against their alleged
defrauder, Obispo, truly defies the normal reaction of
ordinary individuals giving rise to the inference that it was
indeed Obispo who was the borrower/debtor and petitioners
were just accommodation mortgagors.
Assuming arguendo that the REM was invalid on the
ground of vitiated consent and misrepresentation by
Obispo, petitionersÊ unjustified failure to act within a

reasonable time after Obispo repeatedly failed to turn over
the mortgage documents, constitutes estoppel and waiver
to question its defect or invalidity. Corollarily, mortgagors
desiring to attack a mortgage as invalid should act with
reasonable promptness, and unreasonable delay may
amount to ratification.17
As to petitionersÊ assertion that they have settled their
loan obligation by paying P250,000.00 to Obispo, we note
that said
_______________
16 TSN, May 16, 2002, pp. 8-9, 12-13.
17 59 C.J.S. § 148, p. 198.
252

Ramos vs. Obispo
amount represents only the principal loan. Does this mean

petitioners assumed that FEBTC granted their loan free of
interest? Or was there any special arrangement with
Obispo in consideration of the mortgage for the latterÊs
benefit? Again, why was there no evidence of such check
payments allegedly made by petitioners to Obispo,
presented in court? This hiatus in petitionersÊ evidence
raises serious doubt on their principal allegation that they
never consented to the third-party mortgage approved by
FEBTC, leading to the conclusion that there was, in fact,
an agreement between Obispo and petitioners to use the
latterÊs property as collateral for the formerÊs credit line
with said bank.
It bears stressing that an accommodation mortgagor,
ordinarily, is not himself a recipient of the loan, otherwise
that would be contrary to his designation as such. We have
held that it is not always necessary that the
accommodation mortgagor be apprised beforehand of the
entire amount of the loan nor should it first be determined
before the execution of the Special Power of Attorney in
favor of the debtor.18 This is especially true when the words
used by the parties indicate that the mortgage serves as a

continuing security for credit obtained as well as future
loan availments.
Here, petitioners as owners signed the REM as
mortgagors and there is no evidence adduced that suggests
fraud or irregularity in its execution. Petitioners are not
contracting parties whom the law considers ignorant or
disadvantaged but former overseas workers with sufficient
education as to be well-aware of the consequences of their
personal decisions, consistent with the legal presumption
that a person takes ordinary care of his concerns. Hence, it
can be reasonably inferred from the facts on record that it
was more probable that petitioners allowed Obispo to use
their property as additional collateral so as to avail of his
existing credit line with FEBTC instead of petitioners
directly applying for a separate loan.
_______________
18 Sps. Belo v. Philippine National Bank, supra note 10.
253
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Ramos vs. Obispo
With the dearth of evidence to back up petitionersÊ story,

the CA found implausible the alleged legal infirmities in
the execution of the REM. The appellate court thus aptly
observed:
x x x it was defendant Obispo who obtained credit

accommodation from defendant FEBTC which he secured with the
mortgage of the subject property. The property mortgaged was
owned by plaintiffs-appellees, considered a third party to the loan
obligations of defendant Obispo with defendant-appellant FEBTC.
It was, thus, a situation recognized by the last paragraph of Article
2085 of the Civil Code x x x. The Real Estate Mortgage admittedly
signed by plaintiffs-appellees, on its face, explicitly states that it is
for the security of „credit accommodations obtained by Raul De
Jesus Obispo,‰ the principal of which is fixed at P1,159,096.00.
While plaintiffs-appellees claim that they sought the help of
defendant Obispo in securing the loan from defendant-appellant
FEBTC, and not to secure the loans obtained by defendant Obispo

himself, they failed to present any evidence, except for their
bare assertion, that they indeed gave their title to defendant
Obispo purportedly to facilitate their loan with defendant-appellant
FEBTC. It is axiomatic that under the Rules on Evidence a party
who alleges a fact has the burden of proving it. A mere allegation is
not evidence, and he who alleges has the burden of proving his
allegation with the requisite quantum of evidence.
It may be argued that having received the amount of
P250,000.00, plaintiffs-appellees became parties to the principal
obligation and as such, the provision of the last paragraph of Article
2085 no longer applies. While it is undisputed that plaintiffs-
appellees received the amount of P250,000.00, the record, however,
reveals that they received the said amount not from defendant
FEBTC but from defendant Obispo. It could be inferred that the
P250,000.00 given by defendant Obispo to plaintiffs-appellees was
some form of remuneration in lending their title to him as security
for his credit line with defendant-appellant FEBTC.
xxxx
From all indications, the failure of defendant Obispo to
pay his loan resulted to the prejudice of plaintiffs-
appellee[s] which may have led them to disown the Real
Estate Mortgage
254

Ramos vs. Obispo
they executed in favor of defendant-appellant FEBTC to

accommodate the loan of defendant Obispo.19 (Emphasis
supplied)
At this juncture, we underscore anew that the Court has

always maintained its impartiality as early as in the case
of Vales v. Villa,20 and has warned litigants that:
x x x The law furnishes no protection to the inferior simply

because he is inferior any more than it protects the strong because
he is strong. The law furnishes protection to both alike·to one no
more or less than the other. It makes no distinction between the
wise and the foolish, the great and the small, the strong and the
weak. The foolish may lose all they have to the wise; but that does
not mean that the law will give it back to them again. Courts
cannot follow one every step of his life and extricate him from bad
bargains, protect him from unwise investments, relieve him from
one-sided contracts, or annul the effects of foolish acts. x x x21
There being valid consent on the part of petitioners as

accommodation mortgagors, no reversible error was
committed by the CA in reversing the trial courtÊs decision
which declared the REM as void and awarded damages to
petitioners.
A preponderance of the evidence is essential to establish
the invalidity of a mortgage, and it has been said that clear
and convincing proof is necessary to show fraud, duress, or
undue influence.22 Any relevant and material evidence
otherwise competent is admissible on the issue of the
validity of a mortgage.23 Petitioners utterly failed to
present relevant evidence to support their factual claims
and offered no explanation whatsoever. Such omission is
fatal to their cause.
_______________
19 Rollo, pp. 38-40.
20 35 Phil. 769, 787-788 (1916).
21 Ocampo v. Land Bank of the Philippines, G.R. No. 164968, July 3,
2009, 591 SCRA 562, 577-578.
22 59 C.J.S. § 149, p. 199.
23 Id.
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Ramos vs. Obispo
WHEREFORE, the petition for review on certiorari is

DENIED for lack of merit. The Decision dated January 27,
2010 of the Court of Appeals in CA-G.R. CV No. 82378 is
hereby AFFIRMED and UPHELD.
With costs against the petitioners.
SO ORDERED.
Leonardo-De Castro, Bersamin and Reyes, JJ., concur.

Sereno (C.J., Chairperson), Please see Dissenting
Opinion.
DISSENTING OPINION
SERENO, C.J.:
I respectfully dissent. While the ponencia affirms the
findings of fact of the Court of Appeals and concludes that
petitioner-spouses agreed to mortgage their property to
secure ObispoÊs debt, I vote to uphold the trial courtÊs
factual conclusion that petitioner-spouses signed the
mortgage contract in blank and were defrauded by Obispo,
as they were unaware that their property would be used as
collateral for his personal loan.
The disparity in our factual findings revolves around the
issue of whether petitioner-spouses intended to be bound as
accommodation mortgagors with respect to ObispoÊs credit
line with Far East Bank & Trust Co. (FEBTC). Intent,
being a state of mind, is rarely susceptible of direct proof
and must ordinarily be inferred from the partiesÊ
circumstances, conduct and unguarded expressions.1 While
the ponencia is correct in pointing out that the facts, as
narrated by petitioner-spouses, are beyond the normal
occurrence of events, their
_______________
1 Feeder International Line, Pte., Ltd v. Court of Appeals, 274 Phil.
1143; 197 SCRA 842 (1991).
256

Ramos vs. Obispo
narration is not entirely incredible and implausible. To my

mind, they have successfully painted an unfortunate but
common picture of individuals who have placed their full
trust in the wrong party and ended up being defrauded in
the end.
Finding that there is a dearth of evidence to back up
their story, the ponencia refuses to give credence to the
testimonies of petitioner-spouses. I believe, however, that
their unwavering testimonies, both on direct and cross-
examination, suffice to establish their claims. Time and
again, this Court has upheld convictions in criminal cases

based on the sole, uncorroborated testimony of a single
witness; there is no reason why we cannot similarly rely on
clear and convincing testimonial evidence in a civil case.
In any event, while it may be argued that there may be
reasonable doubt as to the actual occurrences in the instant
case, a reading of the records firmly establishes that
FEBTC failed to exercise the extraordinary diligence
required from it as a banking institution. During trial, the
bank officer who served as an instrumental witness to the
real estate mortgage contract, and who had the duty to
witness its execution, admitted that petitioner-spouses did
not sign the contract in his presence, to wit:
Q: Mr. Witness, on this real estate mortgage there are two (2)
signatures appearing under the words „Signed in the presence of‰.
Do you know these two (2) signatures?
A: Yes, sir. The signature of our manager at that time, Virginia
Clemeno, sir.
Q: Your signature is on the left?
A: Yes, sir.
Q: And on the right is?
A: The signature of our manager sir.
xxxx
Q: Now, when you received the Mortgage Contract, am I correct that
Spouses Ramos did not sign the Mort
-257
VOL. 692, FEBRUARY 27, 2013 -257

Ramos vs. Obispo
gage Contract in your presence because you had known them?

A: Yes, sir. The signature [sic] were there already.
Q: Just answer yes or no.
A: Yes, sir.
THE COURT:
They did not . . .
ATTY. VILLAVERT:
That Spouses Ramos did not sign in his presence, your
Honor, and he answered yes.2 (Emphases supplied)
Furthermore, the bank officer testified that it is the

bankÊs standard procedure that the real estate mortgage
form is presented to him for signature after the mortgagors

have accomplished it, after which he forwards the
document to respondent bankÊs legal department. His
testimony shows:
Q: Mr. Witness, what is the bank procedure that is being done with
respect to the execution and submission of the real estate
mortgage?
A: The document has to be filled up and signed by the mortgagors
before it was presented to us for our signature and then we sent it
to our legal department.
Q: Is this the standard procedure that is followed?
A: Yes, sir.3
The signature of the bank officer as an instrumental

witness to the real estate mortgage was not intended to be
an idle ceremony or an empty mechanical act. By acting as
witness to the instrument, he was attesting to the fact that
the mortgagors actually signed the document in his
presence.
_______________
2 TSN, 4 December 2003, pp. 331-332; 335-336.
3 Id., at pp. 332-333.
258

Ramos vs. Obispo
That he could take his role as an instrumental witness

lightly leads to the conclusion that FEBTC was remiss in
its duty to exercise the diligence required from it as a
banking institution. That this procedure was the standard
practice of respondent bank in processing loans and
mortgages seals the finding of negligence on its part.
In Philippine Trust Company v. Court of Appeals,4 we
have ruled that because the business of banks is imbued
with public interest, they are expected to exercise more
care and prudence than private individuals, even in cases
involving registered lands. Banks, therefore, have the duty
of proving that they have exercised extraordinary
diligence in approving the mortgage contract in question.5

Had FEBTC been diligent enough, it could have
prevented the unfortunate incident in question. As lender
and mortgagee, it had the duty to ascertain whether
petitioner-spouses had really agreed to become
accommodation mortgagors with respect to respondent
ObispoÊs loan. It could have required petitioner-spouses to
personally appear and sign the mortgage contract before its
representatives. It could have required Obispo to present a
special power of attorney to prove that he had been
authorized to constitute a third-party mortgage over
petitioner-spousesÊ real property. It could even have made a
phone call to petitioner-spouses to verify whether they did
intend to mortgage their property to secure ObispoÊs debt.
All these safeguards respondent bank failed to observe.
Instead, it permitted its bank officers to act as
instrumental witnesses, even if the mortgagors had not
actually executed the mortgage contract in the officersÊ
presence.6 It chose to rely solely on the signed mortgage
contract, as well as the transfer certificate of title which
was in petitioner-spousesÊ
_______________
4 G.R. No. 150318, 22 November 2010, 635 SCRA 518, 530.
5 Id.
6 TSN, 4 December 2003, p. 335.
259
VOL. 692, FEBRUARY 27, 2013 259

Ramos vs. Obispo
names, which were brought to the bank by Obispo without

iota of evidence that he was authorized to do so.
In situations such as these, I believe that the interests of
society would best be served if the economic risk of the
transaction is placed on the negligent bank. Banks play a
central role in the economic life of our society, and it is not
without reason that we have placed upon them the burden
of exercising extraordinary diligence when dealing with
other economic actors. Thus, I vote to GRANT the instant
Petition for Review, SET ASIDE and REVERSE the

assailed Decision and Resolution of the Court of Appeals in
CA-G.R. CV No. 82378, and REINSTATE the Decision of
the Regional Trial Court, Branch 82, Quezon City, in Civil
Case No. Q-99-38988.
Petition denied, judgment affirmed and upheld.
Notes.·The law imposes a duty of extraordinary

diligence on the collecting bank to scrutinize checks
deposited with it, for the purpose of determining their
genuineness and regularity. (Go vs. Metropolitan Bank and
Trust Co., 628 SCRA 107 [2010])
The question of whether transactions with a bank were
accommodation loans for somebody elseÊs benefit is clearly
factual. (Maxwell Heavy Equipment Corporation vs. Yu, 638
SCRA 653 [2010])
··o0o··
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16 RAMOS Vs OBISPO

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SUPREME COURT REPORTS ANNOTATED VOLUME 692 4/1/20, 3:29 AM

G.R. No. 193804. February 27, 2013.*

SPOUSES NILO RAMOS and ELIADORA RAMOS,

Civil Law; Accommodation Mortgage; Third persons who are

VOL. 692, FEBRUARY 27, 2013 241

Ramos vs. Obispo

Remedial Law; Evidence; Preponderance of Evidence; Burden of

evidence. Moreover, parties must rely on the strength of their own

242 SUPREME COURT REPORTS ANNOTATED

Ramos vs. Obispo

Civil Law; Accommodation Mortgage; An accommodation

otherwise that would be contrary to his designation as such.·It

VOL. 692, FEBRUARY 27, 2013 243

Ramos vs. Obispo

PETITION for review on certiorari of a decision of the

244 SUPREME COURT REPORTS ANNOTATED

VOL. 692, FEBRUARY 27, 2013 245

refer the matter to their lawyer for the filing of appropriate

246 SUPREME COURT REPORTS ANNOTATED

On motion of petitioners, Obispo was declared in default

WHEREFORE, premises considered, judgment is hereby

FEBTC appealed to the CA which reversed the trial

WHEREFORE, the assailed January 29, 2004 Decision of the

VOL. 692, FEBRUARY 27, 2013 247

99-38988 is hereby REVERSED and SET ASIDE and a new one is

Petitioners filed a motion for reconsideration but it was

The petition has no merit.

248 SUPREME COURT REPORTS ANNOTATED

The validity of an accommodation mortgage is allowed

VOL. 692, FEBRUARY 27, 2013 249

their opponent. This principle equally holds true, even if

250 SUPREME COURT REPORTS ANNOTATED

presumed·it must be proved by clear and convincing

petitioners who could have easily obtained copies or record

VOL. 692, FEBRUARY 27, 2013 251

tempted to ask how petitioners could have possibly arrived

Obispo, petitionersÊ unjustified failure to act within a

252 SUPREME COURT REPORTS ANNOTATED

amount represents only the principal loan. Does this mean

used by the parties indicate that the mortgage serves as a

VOL. 692, FEBRUARY 27, 2013 253

With the dearth of evidence to back up petitionersÊ story,

x x x it was defendant Obispo who obtained credit

FEBTC, and not to secure the loans obtained by defendant Obispo

254 SUPREME COURT REPORTS ANNOTATED

they executed in favor of defendant-appellant FEBTC to

At this juncture, we underscore anew that the Court has

x x x The law furnishes no protection to the inferior simply

There being valid consent on the part of petitioners as

VOL. 692, FEBRUARY 27, 2013 255

WHEREFORE, the petition for review on certiorari is

Leonardo-De Castro, Bersamin and Reyes, JJ., concur.

256 SUPREME COURT REPORTS ANNOTATED

narration is not entirely incredible and implausible. To my

again, this Court has upheld convictions in criminal cases

VOL. 692, FEBRUARY 27, 2013 -257

gage Contract in your presence because you had known them?

Furthermore, the bank officer testified that it is the